Romania's president says first EUR 5bn from external loan transfered to restart economic engines

Publish date: 06-05-2009
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Romanian president Traian Basescu told the Foreign Investors Council in the country that the first 5 billion euro installment, part of 20-billion euro external loan contracted, were transfered and should the central bank (BNR) by tomorrow the latest.

Today Ecofin also approved the 5-billion euro loan for Romania and a first part of 1.5 billion euros should get here by July.

Romania inked deal with the International Monetary Fund (IMF), the World Bank, the European Commission and other lenders at the end of March, borrowing some 20 billion euros altogether.

Last night, IMF officially announced the two-year accord with Romania was approved by the executive council.

The money coming from abroad will be a godsend to the country and help authorities weather out the economic crisis by cushioning the effects of the steep drop of capital inflows and by strengthening the financial sector.

Basescu told foreign investors in Romania that the money will insure the economy stability in the country, without "painful adjustments."

At the same time, the president urged investors to become the state's partner in fighting the economic crisis, pointing to a possible "social crisis", rushed by the election risk this year when presidential elections are due.

A good weapon against the economic downturn is a ban on budget spending profusion considering worrying news on the 6 percent economic contraction of some big economies.

"Think ten times before going for massive dismissals," the president also urged investors, stressing resources are limited and too many unemployed would spur the crisis instead of crushing it.

March alone brought 513,000 jobless people, the maximum level of the last three years close to the initial estimate of the Labor Ministry concerning the unemployment rate at the end of the year, shows the data from the National Labor Agency ANOFM. There have not been so many jobless people since April 2006, when the agency had evidence of 517,278 people.

The unemployment rate climbed by 5.6 percent month-on-month, from the 4.1 percent recorded in February.


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